Financial News: Bank Of Canada Cuts Interest Rates By Another

Bank Of Canada Cuts Interest Rates By Another Quarter Point

(RTTNews) - The Bank of Canada on Wednesday announced its widely expected decision to lower interest rates once again, cutting rates by a quarter point for the second consecutive meeting.

The Canadian central bank said it reduced its target for the overnight rate by 25 basis points to 2.25 percent, with the Bank Rate at 2.5 percent and the deposit rate at 2.20 percent.

The decision to continue lowering rates was attributed to ongoing weakness in the economy and expectations inflation will remain close to the BoC's 2 percent target.

Following the rate cut, the BoC said it sees the current policy rate at "about the right level" to keep inflation close to 2 percent while helping the economy through the current period of structural adjustment but noted it is prepared to respond if the outlook changes.

The BoC noted the Canadian economy is facing a difficult transition, with the structural damage caused by the trade conflict with the U.S. reducing the capacity of the economy and adding costs.

"This limits the role that monetary policy can play to boost demand while maintaining low inflation," the BoC said. "The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval."

With regard to the economic outlook, the BoC said it expects Canadian GDP to grow by 1.2 percent in 2025, 1.1 percent in 2026 and 1.6 percent in 2027.

"On a quarterly basis, growth strengthens in 2026 after a weak second half of this year," the BoC predicted. "Excess capacity in the economy is expected to persist and be taken up gradually."

The Canadian central bank noted the next scheduled date for announcing the overnight rate target is December 10, 2025.

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